Open Letter About Oil and Gas Development from the Montana State Director

The last time the U.S. produced more energy than it used, Harry Truman was still president. A lot has changed since 1952. Montana has changed too. We have more people living in more and bigger houses. We have more people driving cars and pickups and SUVs and ATVs and boats and motor homes. We have more people wanting to hunt or fish or hike or just get away from it all. We have more people wanting more public lands preserved in a pristine condition.

Unfortunately, one thing hasn’t changed; we don’t have any more land, just more pressure from all directions to use it.

Montana covers some 94 million acres. About 8 million acres of that land is administered by the Bureau of Land Management. We’re also responsible for a 32 million-acre fluid mineral estate, a fancy way to say oil and gas. About a quarter of that federal oil and gas acreage is off limits to development.

To give you some perspective on our oil and gas program, in fiscal year 2007, BLM issued 178 drilling permits in Montana, about 23 percent of the total issued statewide. The remaining 602 permits (77 percent) were contained in the two-thirds of Montana’s fluid minerals that are non-federal and completely outside BLM’s purview. The state has its own leasing system, and private owners can lease or develop their own minerals.

At BLM, we continually seek a balance between the intrinsic value of open space, solitude and recreation, and the need to provide energy and commodities while conserving our natural resources for present and future generations. Congress has given us these marching orders through numerous laws. The 1920 Mineral Leasing Act is one of them. It requires us to make federally-owned oil and gas available for leasing.

Oil and gas development is nothing new in Montana; it’s been going on since the first decade of the 1900s. Just as it was then, leasing and any subsequent development is market driven.

One difference today is the multiple layers of environmental studies and reviews that take place before an area is offered for lease and before drilling is allowed on leased land. We monitor oil and gas operations until a well is properly plugged and the site has been reclaimed. And our inspection totals continue to exceed quotas. For example, from 2003 through 2007 we conducted some 8,600 drilling, production, plugging and environmental inspections.

It’s important to note that not all land offered for lease is actually leased, not all leases result in drilling permits, and not all wells drilled actually produce. For example, in March 2007 we offered 38 parcels for lease in Beaverhead County covering land that had been nominated by industry. When the auction was over, only seven parcels received bids. That wasn’t surprising to us, since our land use plan for that area predicts that only 10 wells will be drilled there in the next decade or so.

Monetarily, leasing is a win-win situation for taxpayers. Even on undeveloped leases, BLM still collects rent that’s shared with the state, and if a lease produces, subsequent royalties are also shared. Montana’s cut was $23 million in 2006.

Obviously, oil and gas can’t be produced without some impacts. But nothing we humans do is completely benign be it hiking, hunting, house building, raising crops or producing energy. However, we at the BLM constantly strive to minimize or mitigate impacts.

Montana’s intermingled land pattern naturally requires cooperative efforts across all ownerships to have workable solutions to the natural resource challenges facing us. With your input to our land-use planning efforts and environmental reviews, we can accomplish our mission of managing the public lands—your lands—for multiple use.

A stable energy supply is the virtual lifeblood of our state and nation. To keep it flowing, we need to nurture new energy technologies, conserve the energy we already have, and cooperate in developing our natural resources responsibly. Together, we can foster working landscapes and conserve our heritage of open space and abundant wildlife that we Montanans cherish so deeply.

If you would like a brief explanation of what’s involved in managing the third of Montana’s fluid mineral estate that is federal, click here.